"Tonight I can report that the state of our State is, much better than before," he told a House Chamber filled with House and Senate lawmakers.

He dove right into legislative success stories starting with tax breaks.

"I have already signed 121 provision into laws. They include the first middle-class tax cut bill, saving one and and one half million Minnesota taxpayers time and money."

Governor Dayton also gave nods to the proposed Segetis Biochemical plant in Hoyt Lakes and AAR Corporation in Duluth for working with the state to help expand business and create new jobs.

"There are more than 2.8 million jobs in Minnesota today. More jobs than ever before in our state's history."

The Governor vowed never again to balance state budgets on the backs of school districts.

"We have repaid all of the $2.8 billion previously borrowed from our schools. Now school districts can put their money into classrooms, not bank loans."

He gave credit to the state's healthcare network for setting Minnesota up to be among the 5th lowest percentage of citizens without health insurance coverage in the nation.

"These low rates have helped MNsure enroll over 206,000 Minnesotans in affordable health coverage, many for the first time. MNsure didn't start well, but it's gotten better, and it will keep on improving."

There is still plenty of work to be done this legislative session, including passing bonding bill. During his address the Governor called for a $1.2 billion in capital improvements.

House and Senate leaders on both sides of the aisle say there are still unresolved issues.

First cost.

"We tried to offer up some scenarios under which we might reach a larger number but we don't have that fully resolved yet," said Senate Majority Leader Tom Bakk (DFL-Cook)

Second which projects to include.

"I think trying to find ways to provide good drinking water to the people of Southwest Minnesota is a much better project than turning water into snow up in Northern Minnesota. So we can do that in an $850,000 limit," said Senate Minority Leader David Hann.

The Senate is expected to unveil it's bonding proposal either Thursday or Friday.